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Fuel subsidy gnaws at ONGC profits
No plans to set up refinery in Rajasthan
New Delhi, June 25
The country’s biggest explorer Oil & Natural Gas Corporation Ltd (ONGC Ltd), net profit for the fourth quarter fell 13.1 per cent year-on year as the state run firm has to bear a subsidy payout of Rs 17,024 crore during the year.

Gas pricing referred to CoS
The Prime Minister’s Office (PMO) has referred to a Committee of Secretaries (CoS) the issue of pricing natural gas found off the east coast, for which petroleum ministry wants market-determined prices.

Small car catches Bajaj’s fancy
New Delhi, June 25
Two-wheeler major Bajaj Auto today said it was developing a concept for a small car but ruled out being a competitor to Tata's much-touted Rs 1 lakh car. "We are experimenting with the concept of a small car but it is not a cheap car."
Managing Director of Bajaj Auto Limited Rajiv Bajaj poses at the launch function of the 220 Pulsar DTS-FI, in New Delhi on Monday.
Managing Director of Bajaj Auto Limited Rajiv Bajaj poses at the launch function of the 220 Pulsar DTS-FI, in New Delhi on Monday. The bike is priced at Rs 81,280 (ex-showroom Delhi) — PTI photo




EARLIER STORIES

 

Montero steers into India

Mitsubishi Motors and Hindustan Motors officials pose with the newly launched Montero at a press conference in New Delhi on Monday.
Mitsubishi Motors and Hindustan Motors officials pose with the newly launched Montero at a press conference in New Delhi on Monday. The two companies jointly launched Mitsubishi Montero.
The 3.2 litre, 16-valve DOHC, turbo-charged intercooled diesel vehicle will be available in India for approximately Rs 34 lakh ($83,394). — Tribune photo by Manas Ranjan

Reconstitute board, says
PSB chief

New Delhi, June 25
Taking strong exception to the interference of non-official directors in the bank’s day-to-day “operational issues”, Punjab and Sind Bank Chairman and Managing Director (CMD) R.P. Singh today demanded reconstitution of the bank’s board and refuted allegations of “favouritism” and “glaring financial irregularities” levelled against him.

REL’s Rosa project achieves financial closure
Chandigarh, June 25
Reliance Energy’s Rosa Power Supply Company Ltd today signed the financing agreements for long-term loans from financial institutions, including lead manager IDBI Ltd. in Mumbai.

Zydus Cadila takes Nikkho for $25m
New Delhi, June 25
Pharma major Zydus Cadila today said it has acquired 100 per cent stake in Brazil-based Nikkho for $25 million.

Latin America on BEML cross hairs
Bangalore, June 25
Public sector undertaking Bharat Earth Movers Limited (BEML) will enter the capital market with a follow on public offer (FPO) of 49,00,000 equity shares of Rs 10 each at a price band between Rs 1,020 and Rs 1,090 per share.

Company law may pit SEBI against govt
New Delhi, June 25
The new company law could mandate that the strength of independent directors on boards of companies should be 33 per cent, pitting the government against SEBI which stipulates that 50 per cent of directors on boards of listed companies should be independent.

Govt brews Special Purpose Tea Fund
Guwahati, June 25
Finally, there is the opportunity for the tea companies of the country to get rid of ageing and hardly producing tea bushes in their estates to boost the productivity and quality of tea output.
Japan’s toy giant Tomy employee displays desktop pet robots “Rocobo” which features changing faces to express its feeling on the LCD display, flap ears, swing bodies to react on sounds and touch, in Tokyo on Monday.
Japan’s toy giant Tomy employee displays desktop pet robots “Roco
bo” which features changing faces to express its feeling on the LCD display, flap ears, swing bodies to react on sounds and touch, in Tok
yo on Monday. Tomy will put it on the market in August. — AFP photo

Minister spices up NE economy
Union Minister of State for Commerce Jairam Ramesh has launched a new initiative of the Spices Board in the backward Karbi Anglong district of Assam to start the organic cultivation of turmeric, ginger and chilli on a large-scale and promote processing and export as well.

Govt acquires RBI's stake in SBI
New Delhi, June 25
India's biggest lender State Bank of India (SBI) today said the government has agreed to pick RBI's 59.7 per cent stake for Rs 35,531.33 crore in cash.

HDIL to hit capital market
Chennai, June 25
The Mumbai-based Housing Development and Infrastructure Ltd (HDIL) will enter the capital market with its public issue of 29,700,000 equity shares on June 28.

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Fuel subsidy gnaws at ONGC profits
No plans to set up refinery in Rajasthan
Tribune News Service

New Delhi, June 25
The country’s biggest explorer Oil & Natural Gas Corporation Ltd (ONGC Ltd), net profit for the fourth quarter fell 13.1 per cent year-on year as the state run firm has to bear a subsidy payout of Rs 17,024 crore during the year.

However, the company recorded a net profit of 8 per cent for the fiscal 2006-07 at Rs 15,643 crore. The company had posted a net profit of Rs 14,431 crore in the 2005-06 fiscal.

Turnover in financial year 2007 increased by 18 per cent to Rs56,904 crore and the company declared a dividend of 310 per cent to its shareholders.

Changes to accounting rules forced the company to pay Rs 11 crore for retirement, medical and wage benefits during the quarter. On top of that, ONGC had to sell crude and oil products to state-run refiners at below- market prices to contribute Rs 46.7 crore to the cost of subsidizing fuel prices.

“ONGC’s gross realisation in crude sales was $66 a barrel, but company had to shell out a discount of $22 to refiners toward subsidised fuel sales. The net realisation for ONGC in 2006-07 was $44 dollar a barrel,“ its chairman R S Sharma said.

He said the ONGC group would invest Rs 1,21,318 crore in 11th Plan period (2007-012) compared to Rs 75,380 crore in the previous plan period.

OVL, the overseas investment arm, will inject Rs 45,334 crore in the five years to 2012, compared to Rs 25,052 crore in the 10th Plan. The group company MRPL will invest Rs 8,316 crore compared to Rs 765 crore in the previous plan.

He said the company had no plans to set up a refinery in Rajasthan and a decision on a pipeline to transport Cairn India’s crude was likely this week.

“The economics (to set up a refinery) was turning out to be worse so now the administrative ministry says that only a pipeline will come up and decision would be taken on June 27,” Sharma said.

“It will be decided whether a pipeline will be laid by ONGC and Cairn or a special purpose vehicle or a third party,” he said.

The company was in talks with Chevron Corp., Total and Royal Dutch Shell to swap oil block stakes.

“ONGC is talking to Chevron, Total and Shell for equity swap with their blocks,” the company’s exploration director D. K. Pande told reporters after a news conference.

The overseas arm of the company ONGC Videsh Ltd plans to invest Rs 420 crore by 2012 in overseas acquisition and development of assets.

“Our 11th five-year plan outlay is Rs 420 crore which we will spend on acquisitions and development of existing properties,” ONGC Videsh Managing Director R.S. Butola said.

The company had spend about Rs 255 crore overseas in the last five years, he said.

The ONGC board has approved Rs 3,248.72 crore for the development of eight marginal fields in Arabian sea in two phases.

The company has decided to construct 12 new offshore support vessels.

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Gas pricing referred to CoS

The Prime Minister’s Office (PMO) has referred to a Committee of Secretaries (CoS) the issue of pricing natural gas found off the east coast, for which petroleum ministry wants market-determined prices.

The move is significant in the wake of differences the petroleum ministry has with power and fertiliser ministries over the methodology adopted for arriving at the gas price, government sources said.

While petroleum ministry favours market-determined price for the gas to commensurate the risk taken by the explorer, the other two ministries want prices should be affordable to power and fertiliser plants. — PTI

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Small car catches Bajaj’s fancy

New Delhi, June 25
Two-wheeler major Bajaj Auto today said it was developing a concept for a small car but ruled out being a competitor to Tata's much-touted Rs 1 lakh car.

"We are experimenting with the concept of a small car but it is not a cheap car," Bajaj Auto Ltd Managing Director Rajiv Bajaj told reporters here.

He was speaking at the launch of 220 cc motor cycle Pulsar DTS Fi model

It is a high technology car being developed through in-house research and development and seeks to redefine small cars, he said. Bajaj categorically ruled out its concept car being a competitor to the Tata's Rs 1 lakh car. — PTI

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Reconstitute board, says PSB chief
Tribune News Service

New Delhi, June 25
Taking strong exception to the interference of non-official directors in the bank’s day-to-day “operational issues”, Punjab and Sind Bank Chairman and Managing Director (CMD) R.P. Singh today demanded reconstitution of the bank’s board and refuted allegations of “favouritism” and “glaring financial irregularities” levelled against him.

Addressing a press conference here along with top officers of the bank and representatives of workers and officers unions, amidst allegations of favouritism to Punjab Chief Minister Parkash Singh Badal’s son Sukhbir Badal in advancing loan, R P Singh accused the present non-official directors of causing “damage to the reputation” of the bank by indulging in making “baseless charges”.

He tried to rebut the allegations levelled against him by the five non-official directors - Harcharan Singh Josh, K.K. Sharma, Umesh Kumar Sharma, Major Krishna Mohini and Kamal Maan- in a letter to the Prime Minister Manmohan Singh.

The PSB CMD said an all out effort has been launched to improve the financial health of the bank and “we will not allow anybody to topple our effort.”

In this context, he pointed out that he has written a letter to the government urging it to appoint persons with knowledge of the banking sector operations as non-official directors.

“The genesis of the complaint lies in the fact that the management has dealt with NPAs in a strict manner as this was an area of huge concern for the Bank. Non willingness to pay inspite of having huge assets, some of the defaulters have been looking at various quarters for relief. Some of them have been approaching the non-official Directors also for gaining concessions in settlements,” R P Singh said.

“Not able to get the desired relief from the management, these non-official directors have launched a false propaganda against the management of the Bank. They are trying to mislead the Government, RBI, Central Vigilance Commission and in fact are afraid of being exposed themselves,” the PSB chief said.

Refuting one of the allegations levelled by Josh that PSB chief had shown favours to Punjab Chief Minister Parkash Singh Badal’s son Sukhbir Singh Badal by extending loan at a cheaper rate of interest and without collateral to M/s Orbit Resorts (P) Ltd in Gurgaon, Singh said the management committee of the board has unanimously given “in principle” approval for sanction of credit facilities amounting to Rs 150 crore for their upcoming project at Gurgaon.

“It was a purely commercial decision taken by the committee. In fact, Kamal Mann, a non-official Director, who is member of the committee, along with other directors, unanimously approved the proposal considering the merits of the case,” he said pointing that “Kamal Mann, who is now signatory to the complaint, had a special word of praise for the project of the company.”

“The resolution of the managing committee of the board stipulates that ‘regular sanction’ would be on the lines of sanction given by Punjab National Bank. The PNB has since released its sanction in favour of the party for a sum of Rs 137 crore at a rate of interest of 11.50 per cent,” he said, asserting that “as resolved, our sanction shall be on the same terms and conditions and the same amount as PNB.”

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REL’s Rosa project achieves financial closure
Tribune News Service

Chandigarh, June 25
Reliance Energy’s Rosa Power Supply Company Ltd today signed the financing agreements for long-term loans from financial institutions, including lead manager IDBI Ltd. in Mumbai.

It has thus become the first independent power producer (IPP) in the northern region to achieve financial closure.

A ray of power for power-starved Uttar Pradesh, the financial closure brings the project into lift off stage.

Speaking on the occasion, a spokesperson of Rosa Power Company said: “Work on the Rosa Power Project (2 x 300 MW) has gathered momentum ever since Reliance Anil Dhirubhai Ambani Group took over the project in November 2006. With all pre-construction formalities completed, the project now enters into the construction phase and we will ensure that the project is completed within schedule”.

The lenders to the project include IDBI, IIFCL, Canara Bank, Syndicate Bank, United Bank, Vijaya Bank, SIDBI, LIC and UTI Bank.

Stage I of Rosa Project is expected to become operational by March 2010, well within XI plan and will generate about 4,500 crore units annually and supply to Uttar Pradesh Power Corporate Ltd. The total investment in the project will be around Rs 2,641 crore, which has been approved by Uttar Pradesh Electricity Regulatory Commission.

Earlier, the company had obtained all necessary clearances and approvals. It had tied up all commercial contracts with respect to sale of power, procurement and transportation of coal, water, engineering procurement and construction. It has already commenced the construction work at site.

The company had entered into a power purchase agreement (PPA) with UPPCL for supply of entire capacity at Stage 1 (600 MW) to UPPCL. It had also signed an implementation and water use agreement with the Government of UP.

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Zydus Cadila takes Nikkho for $25m

New Delhi, June 25
Pharma major Zydus Cadila today said it has acquired 100 per cent stake in Brazil-based Nikkho for $25 million.

The acquisition will boost the company's existing generic business in Brazil by providing enhanced reach and distribution.

''We have been looking at acquisitions that can add value to operations in our key, focused markets. The Brazilian market is reasonably large and is growing rapidly. With Nikkho, we gain a company with a heritage,'' said company's Chairman and Managing Director Pankaj R. Patel.

''It stands for high quality therapeutic products and has a strong equity with the doctors. This gives us an opportunity to build our presence further in a growth-driven environment.

We now see ourselves adding value to our global expansion strategy by successfully penetrating the branded generics market in Brazil.''

The company which had set up its Brazilian subsidiary in 2002 has already registered 13 products which are being marketed as generics. — UNI

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Latin America on BEML cross hairs

Bangalore, June 25
Public sector undertaking Bharat Earth Movers Limited (BEML) will enter the capital market with a follow on public offer (FPO) of 49,00,000 equity shares of Rs 10 each at a price band between Rs 1,020 and Rs 1,090 per share.

Announcing this at a news conference here, BEML Chairman and Managing Director VRS Natarajan said the offer, opening on June 27, would close on July 3.

He said Rs 100 crore would be earmarked for acquiring a plant in Brazil. He said the company had initiated measures on this front, including opening of a global warehouse office at Kuala Lumpur. A company would be acquired at Rio De Janeiro in a few months to cater to Latin America. — UNI

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Company law may pit SEBI against govt

New Delhi, June 25
The new company law could mandate that the strength of independent directors on boards of companies should be 33 per cent, pitting the government against SEBI which stipulates that 50 per cent of directors on boards of listed companies should be independent.

"I think the figure of one-third is sufficient," Minister of Corporate Affairs Prem Chand Gupta told newspersons here on the sidelines of a seminar on accounting standards organised by Assocham.

The J.J. Irani Committee, formed to suggest the framework of the new law, has recommended that the independent directors should form one-third of the boards.

The minister said that SEBI was a sectoral regulator for listed companies while the law would deal with all companies and would have wide scope of work.

When asked whether a situation could emerge where listed companies comply with SEBI guidelines while unlisted companies could fill 33 per cent of their board positions with independent directors, Gupta refused to comment. — PTI

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Govt brews Special Purpose Tea Fund
Bijay Sankar Bora
Tribune News Service

Guwahati, June 25
Finally, there is the opportunity for the tea companies of the country to get rid of ageing and hardly producing tea bushes in their estates to boost the productivity and quality of tea output.

Union Minister of State for Commerce Jairam Ramesh today launched the Rs 4,760 crore Special Purpose Tea Fund (SPTF) to be spent over the next 15 years in replanting and rejuvenating over 50-year-old tea bushes in 100 tea estates that accounts for 80 per cent of the country’s total tea production.

The STPF will target 2 lakh hectares out of total 5 lakh hectares under tea plantation in the country. Launching the STPF in presence of bigwigs of tea industry, chairman of Indian Tea Board, Basudeb Banerjee, Ramesh said: “We hope that at the end of 15 years when the STPF will be completely utilised, the current average tea productivity 1.7 tons per hectare will increased to 2.3 tons per hectare.”

The STPF is a composition of 25 per cent subsidy provided by the Government of India, 25 per cent contribution from beneficiary tea estates and 50 per cent soft loans from banks and other financial institutions.

The 50 per cent of beneficiaries will be from Assam where there are over 800 tea estates, including some very old ones set up in British Era. Rest of the beneficiaries will be from West Bengal (25 per cent) and Tamil Nadu-Kerala (25per cent).

The STPF was launched today with signing of loan agreement between the Tea Board and 82 tea gardens from Assam owned by 24 different companies. The total amount involved is Rs 48 crore including Rs 12 crore from beneficiaries, Rs 12 crore from Government of India and Rs 24 crore soft loan from banks and other financial institutions.

The STPF fund is provided to replant ageing tea bushes in tea estates located in plain areas and rejuvenation of old tea bushes located in hilly tea growing regions.

The minister informed that the ministry will soon launch similar special purpose fund for the benefit of growers of coffee, rubber, pepper, cardamom, cashew and cocoa in the country.

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Minister spices up NE economy
Tribune News Service

Union Minister of State for Commerce Jairam Ramesh has launched a new initiative of the Spices Board in the backward Karbi Anglong district of Assam to start the organic cultivation of turmeric, ginger and chilli on a large-scale and promote processing and export as well.

The minister announced that two companies have been set up as producers’ companies under Section 581 of the Companies Act, 1956, Coinonya Farms Producers Company Limited for turmeric and Karbi Farms Producer Company Limited for ginger and chilli for this purpose.

Producers’ Companies is a new provision in the Companies Act which gives primary producers’ the flexibility to organise themselves as a normal company but on the basis of a one man-one vote principle which is the essence of a cooperative institution.

Producers’ company combines the economic advantage of a corporate entity with the social benefits of a cooperative. The two companies are located in Paroli and Rongmanpi in the Hamren sub-division of Karbi Anglong district. Each company has a full-time chairman and a managing director.

The Spices Board owns 49 per cent of each company and its equity stake is Rs 1 crore in each company. Local tribal farmers, mostly small and marginal, traditionally practicing jhum cultivation own 51 per cent in each company. Land owned by these farmers has been transferred to these two companies as their contribution to equity.

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Govt acquires RBI's stake in SBI

New Delhi, June 25
India's biggest lender State Bank of India (SBI) today said the government has agreed to pick RBI's 59.7 per cent stake for Rs 35,531.33 crore in cash.

The RBI’s entire shareholding aggregating 31,43,39,200 shares with a face value of Rs 10 will be transferred to the central government on June 29, SBI said in a communique to the BSE. The government has promulgated SBI Amendment Ordinance 2007 on June 21 and amended the State Bank of India Act, 1955, for buying RBI's entire shareholding in SBI.

The RBI's proposal for transferring its entire shareholding in the country's largest commercial bank to the government was approved by the Cabinet in its meeting held on February 1 this year.

This decision of the government was formally announced by finance minister P Chidambaram in his Budget speech and a sum of Rs 40,000 crore was provided. — UNI

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HDIL to hit capital market

Chennai, June 25
The Mumbai-based Housing Development and Infrastructure Ltd (HDIL) will enter the capital market with its public issue of 29,700,000 equity shares on June 28.

Company's director Joseph A Pattathu said today it would raise about Rs 1,500 crore through the IPO.

The price band has been fixed at Rs 430 to Rs 500 per equity share of Rs 10 each. The issue would open on June 28 and close on July 3. — UNI

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BRIEFLY

IndusInd Bank
New Delhi, June 25
IndusInd Bank today said it would raise up to Rs 400 crore during the current fiscal. "We have headroom to raise up to Rs 400 crore through tier II bonds in 2007-08," IndusInd Bank executive vice-President J Moses Harding told reporters here. However, the bank will decide on the time and quantum as per the requirement, he said.— PTI

Hll’s new name
Mumbai, June 25
FMCG major Hindustan Lever (HLL) today said it has received government's approval to change its name to "Hindustan Unilever Ltd" following which, its new corporate identity represented by a new logo will come into effect. "The identity symbolises the benefits we bring to our consumers and the communities we work in. Our new identity will help us confidently position ourselves in every aspect of our business," Hindustan Unilever CEO Doug Baillie said. —TNS

TCS ranking
New Delhi, June 25
Tata Consultancy Services (TCS) has been ranked among the leading global IT companies by global magazine BusinessWeek, besides being the only Indian entity to be listed among the world's top 10 profitable firms. BusinessWeek in its '2007 Information Technology 100 listing' has placed TCS on 23rd position among world's leading IT companies. — PTI

USIBC honour
New Delhi, June 25
The US-India Business Council (USIBC) will confer the 'Global Vision' 2007 award for leadership on Reliance Industries chairman Mukesh Ambani in Washington on June 27. Boeing chairman, president and CEO James W McNerney will also be presented with the leadership award at the council's 32nd anniversary summit.— PTI

Khaitan outlets
Kolkata, June 25
Khaitan Electricals Ltd (KEL) is planning to retail its hi-end fans, targeting the premium segment, through its new branded outlets, while mass fans will be sold through the existing distribution network. "The company will open 25 such outlets across the country by March 2008. And, we are looking at a Rs 50 crore turnover from these outlets for one full year of operation," company VP corporate Mohan Kant said here today. — PTI

TVS revenue
Chennai, June 25
TVS Electronics has earned a revenue of Rs 77.5 crore during the quarter ending March 31, 2007, a growth of 19 per cent over the corresponding quarter in the previous year. The profit before tax (PBT) was Rs 2 crore as compared to Rs 1.8 crore during the corresponding quarter in the previous year. The total income generated in the year 2006-07 was Rs 277.1 crore as against Rs 265.7 crore in 2005-06. The PAT was at Rs 1.9 crore. — UNI

Everonn IPO
Chennai, June 25
Education and training company Everonn Systems India is entering the capital market with a public issue of equity shares of face value of Rs 10 each for cash at a premium aggregating Rs 50 crore, a top company official said. The price band for the issue has been fixed at Rs 125 to Rs 140 per equity share. The issue opens on July 5 and will close on July 11. — PTI

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